MRL2601
Assignment 2 Semester 2 2024
Detailed Solutions, References & Explanations
Unique number: 867625
Due Date: 20 September 2024
QUESTION 1 (2 ANSWERS PROVIDED)
Section 54 of the Close Corporations Act 69 of 1984 stipulates that any member of a close
corporation is an agent of the corporation when dealing with an outsider. This implies that any
act by a member binds the corporation, regardless of whether the act pertains to the
corporation's business. However, the corporation will not be bound if the member lacked
authority and the third party knew or reasonably should have known about this lack of authority.
In the case of J & K Timbers (Pty) Ltd v GL& S Furniture Enterprises CC 2005 (3) SA 223 (N),
the court held that a member acts as an agent of the corporation even without express or implied
authority unless the third party was aware or ought to have been aware of the lack of authority.
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